Often, we view blockchain and gold bullion as competitors for the same prize. Which one will be more valuable: Bitcoin or gold? Which one should we put our trust in?
The reality is that, when it comes to Bitcoin, it’s the underlying technology – blockchain – that is the most valuable when it comes to trading gold. While the fate of Bitcoin and other cryptocurrency is largely unknown, blockchain technology is already becoming recognised as a trustworthy and traceable option for digital tracking of physical gold and other bullion.
As executives look upon blockchain more favourably, companies globally will need to move towards blockchain-backed tracking of gold bullion. Here’s why.
How does digital gold tracking work?
Gold is especially vulnerable to fraudulent trading and unethical sourcing. These are the core reasons that gold tracking is so important in modern society. Manual processes can no longer do the job. Improved digital tracking is quickly becoming a necessity in the gold tracking sector.
Blockchain allows us to track gold data securely and transparently. By integrating with other tech such as remote devices through the Internet of Things, we can know the source of our gold and where it is going.
By putting this data on the blockchain, companies ensure that this data is secure, hasn’t been tampered with or deleted, and that it has been sourced transparently.
The primary use cases for this gold tracking are across authenticity (ensuring the bullion comes from where it claims to) and fraudulent gold (ensuring that the gold is, in fact, pure gold and undiluted).
Recently, several gold fraud cases have highlighted the two primary sources of fraudulent gold: gold that is genuine but not sourced from the correct supplier, meaning it could be conflict gold, or gold that is not pure. This might be gold that partially consists of copper or has tungsten in the centre.
Why is it so important now?
With the crisis surrounding COVID-19, and its immense impact on the economy and digital and physical assets, people are looking towards a stable currency. The value of gold has gone up significantly. Backing gold digitally provides improved confidence in its ethics and overall reliability.
It is also far more difficult to track gold during a pandemic. Many countries are closing their borders and limiting travel. There are harsher working conditions within mine sites with increased social distancing and less employee presence.
This means that, amidst it all, mining companies need efficient and time-saving tracking technologies to get things right when manual processes cannot.
Here’s where blockchain excels: in its transparency that goes across borders and provides global visibility across supply chains.
Blockhead Technologies tracks physical gold bullion throughout the supply chain from mine to end consumer. You can find out more about STAMP Supply here or contact us here for a demo or more information.